Defendant HOA’s Breach Of Owner/Developer’s Valid Contractual Access Rights Was The Common Core Involved In The Causes Of Action, So Apportionment Of Fees Not Required.
In Millennium-Diamond Road Partners v. Diamond Bar etc., Case No. B285539 (2nd Dist., Div. 3 Sept. 24, 2019) (unpublished), Owner/Developer Millennium sued HOA when it revoked Millennium’s access to undeveloped parcels of land Millennium had purchased for the purpose of developing residential properties.
The undeveloped parcels of land were landlocked and adjacent to a guard-gated residential community known as Diamond Bar Country Estates. From 1997 until October 2013, Millennium had easement access via Country Estates – access that was abruptly revoked when a new group of board members began to oppose Millennium’s development.
Substantial evidence doomed HOA at trial – with the trial court finding that HOA breached Millennium’s valid contractual access rights pursuant to CC&Rs, a second contractual agreement providing Millennium an option for access rights for which Millennium had tendered the required fee, and a recorded annexation agreement under which the Millennium parcels became a part of the Country Estates development.
HOA argued that the CC&Rs were not at play as Millennium had not paid monthly assessments. HOA also claimed Millennium had failed to pay fees owed under the annexation agreement. The trial court rejected both claims. The language of the CC&Rs contradicted HOA’s argument– providing the HOA “no power to cause a forfeiture or abridgement of an Owner’s right to full use and enjoyment of his Lot” absent a judicial/arbitral order or foreclosure. The annexation agreement did include a schedule of payments to be made to the HOA. However, the first payment under the schedule was triggered by an event that had not yet occurred, so no annexation fees were yet due.
At trial, Millennium’s expert testified and explained his computations of Millennium’s damages of $1,673,691 in detail. HOA did not challenge his methodology or calculation, nor did it call its own expert witness regarding damages, and the trial court awarded the entire amount Millennium claimed as damages. Additionally, the trial court awarded Millennium prejudgment interest at 10% with a start date of January 2014.
Millennium’s win triggered an award of attorneys’ fees pursuant to Civil Code section 5975(c) which mandates the award of attorneys’ fees in a successful action to enforce the governing documents of a common interest development. The trial court awarded the full amount requested with no apportionment.
HOA appealed, but fared almost no better – achieving only a small victory related to the start date for calculation of the prejudgment interest. The 2/3 DCA found substantial evidence supported the trial court’s decision, but remanded for prejudgment interest calculations to begin on March 23, 2017 instead of January 2014. It further determined that the HOA had fashioned its appeal largely “as an attack on the factual findings of the trial court.” Citing Waller v. Brooks (1968) 267, Cal.App.2d 389, 393, the 2/3 DCA stated that the HOA “misconceiv[ed] the function of an appellate court which is to review errors of law, and not to pass on questions of fact.”
As to apportionment of the attorney fees, the 2/3 DCA found no abuse of discretion as Millennium’s causes of action were so intertwined, and involved a common core of facts which were directly related to enforcement of the governing documents, such that apportionment was impracticable.
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